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2022 Supreme(Guj) 577

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
B.N. KARIA, J.
NARHARIBHAI CHATURBHAI PATEL – Petitioner
Versus
ASHISH MUKUNDLAL SHAH – Respondent
Special Civil Application No. 2082 of 2015, Civil Application No. 1 of 2015
Decided On : 24-05-2022

Advocates:
Advocate Appeared:
For the Petitioners: PERCY KAVINA, P.A. MEHDI.
For the Respondents: SHALIN MEHTA, ADITI S. RAOL, B.S. PATEL, CHIRAG B. PATEL.

The plaintiff has an absolute right to withdraw the suit unconditionally, and the defendant's application for transposition must be permissible under the circumstances. The defendant can raise their claims in their own suit, and the judgment in R. Dhanasundari @ R. Rajeswari vs. A.N. Umakanth and Others was deemed inapplicable.

Headnote:

Withdrawal of Suit - Companies Act - [Order 23 Rule 1(A) of the Code] - The court allowed the plaintiff to withdraw the suit unconditionally, quashing the order permitting the defendant to be transposed as the plaintiff. The plaintiff's absolute right to withdraw the suit unconditionally was upheld, and the defendant's application for transposition was deemed impermissible. The court emphasized that the defendant could raise their claims in their own suit, and the judgment in R. Dhanasundari @ R. Rajeswari vs. A.N. Umakanth and Others was deemed inapplicable.

Fact of the Case:

The plaintiff filed a suit against the defendants, seeking to withdraw it unconditionally. The defendants applied to be transposed as plaintiffs, which was allowed by the trial court. The plaintiff challenged this decision, asserting their absolute right to withdraw the suit unconditionally.

Finding of the Court:

The court held that the plaintiff had an absolute right to withdraw the suit unconditionally, and the trial court erred in not permitting the withdrawal. The order allowing the defendant's transposition as plaintiffs was quashed and set aside.

Issues: The main issue was whether the plaintiff could withdraw the suit unconditionally and whether the defendant could be transposed as plaintiffs. The court also considered the pending Special Civil Suit No. 139 of 2005 filed by the defendant no. 1.

Ratio Decidendi: The court emphasized the plaintiff's absolute right to withdraw the suit unconditionally and deemed the defendant's application for transposition impermissible. It was also noted that the defendant could raise their claims in their own suit, and the judgment in R. Dhanasundari @ R. Rajeswari vs. A.N. Umakanth and Others was deemed inapplicable.

Final Decision: The court allowed the plaintiff to withdraw the suit unconditionally, quashing the order permitting the defendant to be transposed as the plaintiff. The order allowing the defendant's transposition was set aside, and the pending Special Civil Suit No. 139 of 2005 filed by the defendant no. 1 was directed to be disposed of expeditiously.

JUDGMENT :

B.N. KARIA, J.

1. Rule returnable forthwith. Learned advocate Ms. Aditi Raol waives service of notice for and on behalf of the respondents no. 1 and 3. Learned advocate Mr. Chirag B. Patel waives service of notice of rule for and on behalf of the respondent no. 4.

2. By way of present petition, petitioners have requested to quash and set aside the judgment and order dated 15.10.2014 passed by learned Civil Judge (S.D.) Vadodara in Regular Civil Suit No. 91 of 2001 by which the application of the respondent no. 1 for transposing himself as well as the petitioner no. 2 company as plaintiffs in Regular Civil Suit No. 91 of 2001 came to be allowed and the purshish of the petitioner no. 1 to withdraw Regular Civil Suit No. 91 of 2001 came to be rejected.

3. Brief facts of the present petition may be summarized as under:

    3.1 The petitioner no. 2 is a private limited company registered under the provisions of the Companies Act. The petitioner nos. 1 and 3 along with the respondent nos. 1, 3 and 4 are the shareholders of the petitioner no. 2 company. The petitioner nos. 1 and 3 are suing through his legally constituted power of attorney. The respondent no. 5 is the Registrar of the Court of the Civil Judge (S.D.) and is a formal party to the present proceedings. That, as on today, the shareholding pattern has undergone a change and the petitioner nos. 1, 3 and the respondent no. 4 herein, in their personal capacity, jointly own more than 90% of the shares of the petitioner no. 2 company. However, originally, the affairs of the petitioner no. 2 company were being conducted exclusively by the petitioner no. 3 and the respondent no. 1 herein.

3.2 The petitioner no. 1, as one of the shareholders in the petitioner no. 2 company, had various grievances against the manner in which the affairs of the petitioner no. 2 company were originally being conducted at the relevant point of time. Under those circumstances, the petitioner no. 1 had filed Regular Civil Suit No. 91 of 2001 against the petitioner nos. 2 and 3 as well as the respondents herein. In the said suit, an application for injunction was also preferred. That, at the relevant point of time, the affairs of the company were primarily being conducted firstly by the petitioner no. 3 and the respondent no. 1 and thereafter solely by the respondent no. 1. Consequently, a reading of the plaint of Regular Civil Suit No. 91 of 2001 would clear demonstrate that almost all the allegations are prime against the respondent no. 1 herein.

3.3 Initially, while issuing notice, ad interim injunction also came to be granted to the petitioner no. 1 herein as prayed. Thereafter, an application Exh.84 for modification of ad-interim injunction came to be filed in the proceedings of Regular Civil Suit No. 91 of 2001. Vide order dated 27.4.2004 the said application came to be allowed and the modification sought came to be permitted. The order dated 27.4.2004 passed below Exh.84 in Regular Civil Suit No. 91 of 2001 came to be challenged by the respondent no. 1 before the Hon’ble High Court of Gujarat by filing Special Civil Application No. 7633 of 2004.

3.4 That, initially, vide order dated 24.9.2004, ad-interim relief came to be granted in Special Civil Application No. 7633 of 2004 to the effect that the operation of the order dated 27.4.2004 passed below Exh.84 in Regular Civil Suit No. 91 of 2001 came to be stayed.

3.5 Ultimately, vide order dated 26.3.2009, Special Civil Application No. 7633 of 2004 came to be disposed off after recording the statement of both sides that they have no objection if the interim relief granted therein is extended upto the hearing of the Exh.5 application in Regular Civil Suit No. 91 of 2001. On the basis of the said statement, the Hon’ble Court directed that the interim relief granted by it would be extended upto the hearing of the Exh.5 in Regular Civil Suit No. 91 of 2001 and that the learned Trial Court would decide Exh.5 after hearing both sides.

3.6 Thereafter, vide ord

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